The Illinois Department of Insurance announced that Land of Lincoln Health, a nonprofit Consumer Operated and Oriented Plan (CO-OP), has received $160 million in federal loans and will now apply for licensure as an Illinois mutual insurer to offer individuals and small business owners health insurance.

Upon receiving state license approval, Land of Lincoln Health will be able to offer health coverage through the Illinois benefits health exchange.

This move to allow health coverage through a CO-OP marks another positive step to provide the people of Illinois more choices for quality healthcare,” said Gov. Pat Quinn.

Land of Lincoln Health, incorporated by Metropolitan Chicago Healthcare Council, is currently the first and only CO-OP in Illinois to receive approval by the U.S. Department of Health and Human Services (HHS).

With an innovative, consumer-focused healthcare delivery model, Land of Lincoln Health is designed to provide Illinois communities with insurance options tailored to meet specific health and budgetary needs.

CO-OPs are member-based and required to use any revenues, after expenses, towards improving the overall quality of healthcare coverage, including lowering insurance premiums and enhancing health benefits.

Individuals and small businesses can purchase health insurance at affordable prices through CO-OPs — both inside and outside of health care exchanges — starting January 1, 2014.

The Patient Protection and Affordable Care Act (PPACA) allows for $3.8 billion in federal funding loans to assist states in establishing CO-OPs with non-profit, member-based health insurance organizations in each state.

Through its state-partnership exchange, Illinois is the 24th state to receive federal approval and funding.